The present invention relates generally to a system for processing the sale of goods and services and, more particularly, to a system for managing the sale of packages of such goods and services by one or more sellers, such as an airline and hotel, to buyers who have submitted offers for the purchase of such a package.
Many sellers have developed sophisticated revenue management systems (RMSs) to optimize revenue. Travel-related sellers, in particular, such as airlines, hotels, cruises and car rental agencies, rely heavily on revenue management systems to dynamically set the price for available inventory. Generally, when a flight is first added to an airline""s flight schedule, for example, the airline""s revenue management system attempts to maximize revenue for the flight by establishing a plurality of price classes and then allocating the number of seats and price assigned to each price class. The revenue management system thereafter continues to monitor the actual demand within each price class relative to forecasted demand, dynamically reevaluating the inventory allocation and pricing of each price class for a given flight. In this manner, the airlines attempt to fly each aircraft as full as possible without allowing earlier-booking discount-fare travelers to displace later-booking full-fare travelers. The revenue management systems of other types of travel-related sellers optimize revenue in a similar manner.
While conventional revenue management systems employ sophisticated tools to anticipate future travel needs, forecasting errors invariably lead to unanticipated excess capacity. In addition, a seller can utilize its revenue management system to forecast anticipated excess capacity, such as excess capacity on a given flight associated with seats that are predicted to be empty. Furthermore, unexpected external events, such as a price war or extreme weather conditions, can also affect a seller""s excess capacity. Thus, in an attempt to reduce such excess capacity, sellers periodically reevaluate the inventory allocation and pricing. Airlines and other travel-related sellers cannot simply discount the published prices for such unsold inventory, however, without either starting a price war or compromising their own underlying price structure (i.e., without also reducing its full-fare prices for business travelers). Thus, there is currently no effective way for airlines and other travel-related sellers to dispose of such excess capacity.
Although many airlines and other travel-related sellers attempt to dispose of excess capacity with xe2x80x9cstandbyxe2x80x9d or xe2x80x9cwait-listedxe2x80x9d travelers, this practice is typically limited to instances where some oversight on the part of either the traveler or the seller has occurred. For example, the traveler""s flight may have been overbooked, the traveler may have missed an original flight, or the traveler may have purchased a ticket on a crowded flight at or near the time of departure. Moreover, standby travel is costly for the airline and is inconvenient for the traveler because there is no guarantee that the traveler will get to fly on the same day.
In addition, many sellers, including airlines and other travel-related sellers, attempt to sell excess capacity as part of a package at a discounted price. Packages may be assembled by the respective seller of the particular goods or services included in a package, or by a third party, such as a travel agent, who assembles packages of goods or services from multiple sellers. For a travel-related package, the packages may be predefined or assembled based on buyer specifications, such as travel dates and desired classes of service. Another method used by sellers to dispose of excess capacity is through the use of third parties, known as consolidators. In the airline environment, for example, the terms of the relationship between the airlines and the consolidators are generally not flight specific and are typically defined months in advance. Thus, the sale of airline tickets through a consolidator does not provide a sufficiently dynamic mechanism for airlines to sell such excess capacity when actual demand fails to meet forecasted demand. Even assuming that airlines and other sellers could release the tickets for sale through the consolidators at the last minute, there is currently no effective way for the consolidators to announce the availability and price of such inventory to buyers.
Airlines and other travel-related sellers recognize that there is a large source of latent demand associated with leisure travelers who are willing to travel at a favorable price. There is currently no effective way, however, for such sellers to receive an offer from a buyer for leisure travel at a particular price set by the buyer, below the seller""s published price. In particular, there is no effective way for the seller to be confident that if the seller accepts the buyer""s offer, the buyer will travel in accordance with the offer, without using the information to ascertain the seller""s underlying level of price flexibility, which, if known to a seller""s competitors or buyers, could dramatically impact the seller""s overall revenue structure. Furthermore, when an offer is associated with a package of goods or services, the price flexibility of each individual component good or service within the package is even further shielded from the seller""s competitors or buyers.
As apparent from the above deficiencies with conventional systems for selling goods and services, such as airline tickets and other travel-related services, a need exists for a system that permits a seller to sell excess capacity when actual demand fails to meet forecasted demand. A further need exists for a buyer-driven system that permits a buyer to obtain packages of goods and services at a price set by the buyer, at a total price typically below the published price of each individual component of the package. Yet another need exists for a system that permits sellers to stimulate sales of excess inventory, without compromising the seller""s published price structure. Another need exists for a system that permits sellers to capture and process consumer demand for each component item in a package, such that the selling price of each individual item cannot be determined by the buyer.
Generally, according to one aspect of the invention, a conditional purchase offer (CPO) management system is disclosed for receiving and processing CPOs from one or more buyers of packages of component goods or services. The package CPO management system preferably deconstructs an overall package CPO into component CPOs which are individually offered to sellers. The package CPO management system determines whether one or more sellers are willing to accept each of the individual components of a given package CPO. If each component CPO of a given package CPO is accepted, the package CPO management system binds the buyer, on behalf of each of the accepting sellers, to purchase the entire package.
In one embodiment, the package CPO management system reserves a margin off of the total offer price, before calculating the offer price for each component CPO. The reserved margin may be utilized, for example, to increase the offer price of one or more component CPOs that remain unaccepted by sellers. An offer price for each component CPO is calculated by initially determining the total market price of the package based on the market price of each individual component good or service within the package. The package CPO management system then calculates an offer price for each component CPO based on the total price offered by the buyer for the entire package (as adjusted by the margin, if necessary) multiplied by the ratio of the market price of the respective component CPO to the total market price of the package.
The individual component CPOs are processed to determine whether one or more sellers are willing to accept each of the individual component CPOs of the overall package CPO. The package CPO management system may filter the component CPOs provided to the various sellers, based, for example, on the industry associated with the component CPO, so that individual sellers only obtain component CPOs of interest. If each component is successfully accepted, the package CPO management system binds the buyer, on behalf of each of the accepting sellers, to purchase the entire package.
As each individual component CPO is accepted by a seller, the package CPO management system preferably enters a xe2x80x9cpre-bindxe2x80x9d agreement with the seller, whereby the component good or service is reserved for a predefined time period to permit the package CPO management system to complete the processing of the remaining active component CPOs. Alternatively, the package CPO management system can enter binding agreements with each seller who elects to accept a component CPO, and fund the difference to complete unaccepted components of the package before expiration at or near market prices. Component CPOs can also be provided to sellers in a particular serial order, based on the likelihood that each component of the package will bind.
According to one aspect of the present invention, the package CPO management system preferably provides an optional agency feature that permits the package CPO management system to accept or reject a given component CPO on behalf of certain agency-based sellers who have delegated such authority to the package CPO management system. Thus, the package CPO management system can preferably provide one or more component CPOs of a received package CPO to each broadcast-based seller, for the seller to independently determine whether or not to accept a given component CPO. In addition, the package CPO management system can evaluate one or more component CPOs of a received package CPO against a number of CPO rules defined by one or more agency-based sellers, to decide on behalf of an agency-based seller to accept or reject a given component CPO. A CPO rule is a set of restrictions defined by a given agency-based seller, to define a combination of such restrictions for which the seller is willing to accept a predefined minimum price.
Once the terms of the package CPO have been received by the package CPO management system, the central controller will preferably execute a package CPO posting process to deconstruct the overall package CPO into component CPOs, and thereafter (1) provide each component CPO to the appropriate broadcast-based sellers and (ii) evaluate each component CPO against the appropriate CPO rules of each appropriate agency-based seller. In addition, once the component CPOs have been posted, the package CPO management system will preferably periodically execute a package CPO monitoring process to determine if each component CPO of an overall package CPO is accepted by an appropriate seller. If each of the individual component CPOs of a given package CPO are accepted by one or more sellers, the package CPO management system notifies and binds the buyer, on behalf of each of the accepting sellers, to purchase the entire package with the appropriate restrictions which meet the conditions defined by the buyer.
A more complete understanding of the present invention, as well as further features and advantages of the present invention, will be obtained by reference to the following detailed description and drawings.